USD/JPY drops to 200-hour MA on trade tensions

USD/JPY tested support at 200-hour moving average (MA) after the bear flag breakdown.
US-China trade war fears have likely put a bid under the anti-risk Japanese Yen.

Omkar Godbole FXStreet Contributor

The bid tone around the Japanese Yen strengthened, pushing the USD/JPY pair down to 110.300 (200-hour MA).

At press time, the currency pair is trading at 110.35 and could find acceptance below the 200-hour MA as indicated by the bear flag pattern in the 15-minute chart.

The JPY likely picked up a bid on fears of a full-blown trade war between the US and China. The United States is due to levy tariffs on $34 billion worth of Chinese imports on June 6. Beijing has assured markets that it would not fire the first shot in the trade war with the US but has vowed to retaliate in kind.

So, it all depends on what Trump administration does on Friday. The decline in the USD/JPY indicates the markets have begun preparing for the worst.

USD/JPY Technical Levels

Resistance: 110.56 (50-hour MA), 111.12 (June 3 high), 111.40 (May 21 high).

Support: 110.30 (200-hour MA), 110.15 (100-day MA), 109.92 (50-day MA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Expanding
1H	Strongly Bearish	Neutral	Expanding
4H	Strongly Bearish	Oversold	Expanding
1D	Bearish	Neutral	Low
1W	Bullish	Overbought	Low
Updated Jul 5, 04:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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